Enter Lostlorn Forest from Route 16; the easiest way is from Nimbasa City . Remember that the Pokemon Breeder at the beginning of the entrance will want to battle you. The water, however, is right at the entrance anyway, so there should be no need to have to battle him.
Move up to the water on the right side of the bridge and use Surf to move onto it. Now move over to the waterfall and use Waterfall to traverse it and reach the top. Once you have, move onto the land on the right side of the stream first.
Grab the item sitting in the Tall Grass, which turns out to be a Rare Candy , then move back onto the water. Head over to the land on the left side of the stream. Now move north until you reach the Veteran. He'll be looking for a battle, so don't disappoint! He's got quite the team!
Trainer Battle: Veteran
Once he's done for, turn on your Dowsing MCHN and use it to find the Grass Gem hidden in the north-west tile of grass at the corner of the cliff. Once you have it, you're done!